Bloomberg’s Budget To Call For Sales Tax Hike

The official word is set for noon today. That’s when New York City Mayor Michael Bloomberg reveals his budget bombshell. It’s expected to include layoffs and higher taxes. If you’re running for re-election, like Mayor Bloomberg is, you certainly don’t want to lay off city workers and raise sales taxes, but the mayor says with the economic crisis facing the city, state and country, he has no other choice. When Bloomberg unveils his final budget plan for the next fiscal year at noon today, sources the mayor intends to raise $900 million to close the budget gap by raising the sales tax half a percent. The sales tax in New York City will now be 8.875 percent; of which only 4.5 percent is a city tax. The rest goes to the state and the Metropolitan Transportation Authority.

But there’s bad news for city workers. The mayor plans to eliminate 13,500 jobs, of which 3,750 will be layoffs and the rest attrition. Teachers, cops and firefighters are exempt from the layoffs.

Even though we’re in a recession, the mayor is expected to use federal stimulus money to keep building schools. 25,000 classroom seats will be built over the next five years, and city unions will be asked to come up with $400 million in savings.

Said Deputy Mayor Edward Skyler: “City agencies and the city’s taxpayers are being asked to do their part and we need labor to do their part.”

Sources said agencies’ budgets are being reduced carefully to maintain vital services like police, education and health care.

The mayor will officially unveil his budget Friday; the City Council must approve it by June 30.